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Eno Transportation Weekly

What Did Transit Advocates Get Wrong In Nashville?

Mass transit advocates in Nashville, Tennessee were dealt a crushing setback one week ago today when a referendum to approve a $6.6 billion mass transit capital program ($8.9 billion once operating and financing costs were factored in) was rejected by voters by almost a 2 to 1 margin.

The tally was 79,327 “no” votes (64 percent) to 44,636 “yes” votes (36 percent). A precinct-by-precinct analysis of the vote in the Nashville Tennessean found that the “trendy, progressive-leaning neighborhoods” voted for the plan, but the rest of the county (Nashville and the surrounding Davidson County merged into one political unit in 1963) voted against the plan, and the “no” percentages were highest in the suburbs (no surprise there) but also in predominantly African-American precincts.

The ambitious plan would have built 27.4 miles of bus rapid transit (BRT) lines and 28.4 miles of light rail (plus a transit tunnel under downtown to be used by both). The plan would also have made investments in improving existing bus service, commuter rail, and bicycle and pedestrian access. (The full plan can be read here and we have put together a one-page summary of the financial aspects of the plan here.)

While some of the failures were peculiar to the city or the state, the Nashville plan also had some problems common to transit plans across the nation as well.

“All politics is local.” There were a number of factors contributing to the defeat that were unique to the city or the campaign (some of which were identified in this excellent article in the Tennessean), which included:

Referendum sponsors (somewhat cynically) chose what was supposed to be the lowest-turnout election of the cycle for the transit vote instead of the November election, in which there will be the gubernatorial, Senate and U.S. House elections. (Obviously, it backfired.)

In a county that is 26.5 percent African-American, referendum sponsors failed to engage that community (whereas the anti-referendum campaign hired a Democratic consultant with a long history of African-American outreach to run the show).

The decision to unify the government of the City of Nashville with that of Davidson County in 1963 gave many more suburban anti-transit voters well outside the range of the proposed transit system the right to vote in this election than would have been the case in many similar-sized cities around the country.

The referendum sponsors couldn’t seem to settle on a message – they couldn’t decide whether economic growth, traffic congestion, housing, the general goodness and righteousness of transit, or the political “dark money” raised by the opposition was the winning message to drive transit supporters to the polls in sufficient numbers.

And, of course, who can forget the fact that the pro-transit campaign was supposed to be led by Nashville’s very popular mayor, Megan Barry, until her career flamed out in a sex scandal that led to her resignation two months ago. Tellingly, only one of the dozen or so candidates to replace Barry in the May 24 special election publicly supported the transit referendum. (But given the size of the vote, it now seems unlikely that her departure was dispositive.)

State-specific problems. There were also some problems with the Nashville plan that don’t apply to all states. These include:

Tennessee, like other states that eschew a personal income tax, has a very high state sales tax rate (7.0 percent). Since the state constitution also forbids municipalities from levying income taxes, local sales taxes are also already high as well (Nashville’s is already 2.25 percent, for a combined state-local sales tax in the city of 9.25 percent). The transit referendum would have increased that by another full point by 2023, to 10.25 percent, which would have tied Chicago for the highest in the country. (If you have to have the local chamber of commerce produce a report that tries to say that a 10+ percent sales tax isn’t really that much of a burden, all things considered, you’ve already lost.) States without income taxes may have less political headroom for local sales tax increases than other states. (Though Seattle did it anyway.)

Tennessee doesn’t put much state funding into mass transit projects (TennDOT’s transit office does the bare minimum duties required to administer federal grants). And the new state law that allows local governments to increase local taxes for transit via referendum also states that money raised this way can only go towards a transit improvement program. This effectively prevents local governments from putting forward balanced highway-transit transportation programs to the voters. This fed the criticism that the transit plan, by itself, wouldn’t really do that much to alleviate traffic congestion.

Not only that, but the mayor before Barry, Karl Dean (not to be confused with Carl Dean, the reclusive husband of Nashville’s most important resident, Dolly Parton), pushed a plan for a bus rapid transit (BRT) line in 2014 and the politics went so badly that the state legislature drastically overreacted and passed a law banning all BRT in the state unless the state highway commissioner and both chambers of the legislature approve the route.

The Nashville transit plan was unable to give more than lip service to the pivotal issue of affordable housing because the state legislature was in the process of passing a new law banning “inclusionary zoning.” The law is quite explicit about its intent: “it is the intent of the General Assembly to clarify that neither Nashville nor any local government has the authority to enact such an ordinance that would place requirements regarding inclusionary, affordable, or below market value housing when entitlements, variances, or any other form of permit or authorization is sought from the local government.” So even though that same legislature also passed another new law last year enabling transit-oriented development that could include privately-owned affordable or workforce housing, the city is powerless to force affordable housing mandates near transit stops. Voters were not wrong to fear that mass transit coming to their neighborhood would mean gentrification and skyrocketing housing costs.

Too much, too soon. At present, Nashville has no fixed guideway mass transit service, and its bus service is widely regarded as inadequate. This is not a new problem. In 2016, the local governments and planning agencies came up with a 25-year regional transit plan (“nMotion”) that had a lot of good ideas but was agnostic on the specifics of what to do when.

It was at this point that the planning organizations engaged in public outreach as to how best to distill the 25-year plan down to something that could be put before voters. According to the planners, “Through these outreach efforts, over 20,000 individual engagements took place, including 9,000 responses to an online survey asking people to indicate preferences with respect to three alternative scenarios for mass transit and regional mobility: Scenario 1 Comprehensive Regional System, Scenario 2 Bus-Focused Expansion, and Scenario 3 Modest Improvements. The overwhelming response was that Middle Tennessee’s leaders should pursue Scenario 1, a bold, long-term investment in mass transit, along with ancillary investments in infrastructure to make the system more effective.”

In other words, the planners allowed an unscientific Internet survey to help talk them into what they probably wanted all along – a plan to go from zero fixed guideway transit routes to nine routes all at once. (In the “crawl before you walk” analogy, the plan went straight from the crib to the Olympic 100-meter dash.)

This necessitated a plan that required almost $9 billion in new funding over the 2018-2032 period, $7.4 billion of which was going to come from new local sources or borrowing. (Bear in mind that the BRT project that caused the legislative backlash only had a total capital cost of $174 million, and the Obama Administration was going to pay 43 percent of that.) The annual Metro Nashville government operating budget, soup to nuts, is only $2.2 billion per year, and the existing five-year capital budget for everything else in the county is only $8.8 billion.

This is a problem inherent in U.S.-style referendums – too often, the voters are only given two solutions to a problem (a binary solution set): do nothing at all, or else do too much, too soon. In this case, it was “rail or fail” with nothing in-between. (It is not a coincidence that it was this referendum process that gave us the inherently flawed California high-speed rail project.) Other countries have used multiple choice ballot questions, but for some reason that practice has not made it stateside yet.

If your biggest immediate transit problem is inadequate bus service, it does not necessarily follow that the only solution to your problem includes spending $5.5 billion in year-of-expenditure dollars constructing light rail (which, after all, is short for “light capacity” rail and which always has a hard time standing up to better bus service in terms of benefit-cost analysis). While most of the 9,000 respondents to the MPO’s Internet survey may have solidly supported the all-in light rail plan, it came up nearly 35,000 votes short once placed in front of actual voters.

Not enough debt. This point is political, not substantive. Tennessee is one of those states that runs a debt-free state transportation program and discourages municipal-level debt. Less borrowing means more money is needed up front. Because of this, comparatively speaking, the program just rejected by voters proposed a fairly high level of immediate self-sacrifice by the taxpayers of Davidson County.

Just look at the totals. The total construction time of the program was supposed to be 15 years (the bus and BRT stuff was going to be very quick, and construction of the light rail lines was going to be staggered through the year 2023). But over the 15-year span of construction of the whole program, which was going to cost $6.6 billion in year-of-expenditure dollars, the program was going to raise $3.6 billion from new local revenue sources. (The entire plan was going to cost an extra $2.2 billion for operating, finance and other costs and would have raised an additional $3.5 billion from borrowing and $1.6 billion from federal grants.)

From a federal point of view, this is exactly what the Trump Administration says it wants– local governments raising their own new revenues to pay for new infrastructure. Anyone who has watched U.S. Transportation Secretary Chao or Acting FTA Administrator Williams testify before Congress recently has become aware of the Trump Administration principle that project sponsors seeking federal approval should put a measurable amount of real state or local revenue into a project during the construction period instead of relying on federal grants and loans for 80+ percent of the cost during that time.

The Nashville plan would have put up 43 percent of the 15-year total cost (capital and operating) via new local revenues. (It is not possible to know how much of the capital cost of any CIG project seeking federal funds would be from new local revenues, but it would in any case be well above what Sec. Chao claims the Hudson River Tunnel’s is.)

What’s the point? In the end, the proponents of the Nashville referendum may have lost sight of the fundamental question that has been inherent in discussions of mass transit since the beginning of the federal role therein – what’s the point?

Is the point of mass transit to move people safely and efficiently where they need to go? Or is the point of mass transit to promote better urban development, better land use, and more “livable” communities?

Sure, the answer is “both,” but it’s almost never both equally, and to that extent, the answer of which consideration is more important usually determines which mode – bus or rail – is a better fit. (There is a long ETW background piece on this coming in a few weeks.)

Voters may not always be as far-sighted as their civic leaders hope, but they are usually smart enough to know that when all the city’s real estate developers band together to support a public policy initiative, it’s probably because those developers think they can make a ton of money if the initiative passes.

The fact that the Nashville plan contained nothing – not even lip service – towards the idea of “value capture” (various ways to make real estate interests pay some of the costs of the public infrastructure that will vastly increase the value of their land) was reason enough for some Nashville voters to believe that the plan was not as dedicated to the public good as was alleged. (Value capture made it into the semifinals for project financing but was rejected before the final plan was put forward.)

A corollary question is – should local transit planners really be prioritizing the needs of people who don’t currently take mass transit ahead of people who do? Read this interview with a leader of the Nashville local bus riders’ group (who opposed the referendum), who said that “one of the things that we consistently say is: ‘Let’s make our existing system better.’ We could have more of the [bus rapid transit] routes — the fast bus routes. We could have better dedicated bus lanes, and we could do that for a tiny fraction of the amount of money they’re planning to spend on this transit plan.”

What next? Nashville voters have conclusively rejected the all-inclusive “rail or fail” plan put forward in December 2017. But the city and region still have tremendous unmet transportation needs. It’s time to go back to the drawing board – but fortunately, the drawing board is already full of workable alternatives.

The plan just rejected by voters took the most expensive parts of scenarios 1 and 2 and crammed them into a 15-year construction period instead of a 25-year period, with the higher taxes that necessitated.

In another year or two, Nashville voters might be convinced to back a less expensive transit initiative, without the light rail – but only if the plan starts with the needs of existing bus riders, develops new bus, rapid bus and BRT route selection through ground-up community engagement instead of top-down decisions by planners and politicians, and makes it clear throughout the process that personal mobility, not real estate development, is the primary consideration at all times. In addition, the state legislature should consider in the meantime how to synchronize its contradictory laws enacted in the last two years that encourage transit-oriented development but ban inclusionary zoning, so that new fixed guideway transit does not automatically equal the gentrification that prices existing residents out of their own neighborhoods.

This is a letter marked "CONFIDENTIAL" from Treasury Secretary Ogden L. Mills to Acting House Ways and Means chairman Charles L. Crisp dated February 16, 1932 recommending that Congress enact a new excise tax on gasoline to help eliminate the projected federal deficit.

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